KARACHI: In a determined effort to combat money laundering through foreign trade, the government has unveiled strict measures, including up to 10 years imprisonment for offenders and the confiscation of implicated consignments. These proposed reforms are detailed in the Finance Bill 2019, aiming to amend the Customs Act, 1969.
The Finance Bill introduces Section 32C to the Customs Act, directly addressing money laundering through trade mis-declarations. This section allows authorities to issue show-cause notices to individuals suspected of overstating import values or understating export values, or vice versa, within two months of seizing the goods. If the accused fail to provide a valid explanation, their shipments will be confiscated.
Severe penalties are also proposed under Section 32C for those found guilty of money laundering. Offenders could face fines of up to PKR 200,000 or three times the value of the goods involved, whichever is greater. Additionally, the goods in question will be confiscated.
Beyond financial penalties, the proposed amendments include a maximum imprisonment term of 10 years upon conviction by a special judge. Offenders may also face fines up to PKR 1 million and the forfeiture of assets tied to money laundering. The Anti-Money Laundering Act, 2010, will be applied to seize these assets or properties of equivalent value.
These steps are part of a comprehensive strategy to tighten anti-money laundering regulations, align with international standards, and protect the national economy from illicit financial activities. Trade mis-declarations, often a front for money laundering, have cost Pakistan significant revenue and undermined its financial credibility.
By imposing harsh penalties, the government aims to deter individuals and businesses from engaging in money laundering. Experts suggest that if enforced effectively, the amendments could foster transparency in trade and bolster economic stability.
Despite these initiatives, concerns linger about the practical enforcement of the new laws. Effective implementation requires vigilant monitoring and robust mechanisms to prevent loopholes. Trade associations have also expressed apprehensions about potential misuse of the enhanced powers, calling for transparency and fairness in enforcement.
The Finance Bill 2019, with its focus on combating money laundering, is anticipated to provoke lively debate among stakeholders as its broader implications for trade and the economy are considered. If adopted, the reforms may mark a significant step forward in Pakistan’s fight against financial crime.
